Hiring a Lawyer
Small businesses cannot get by without legal help at some point. Because there are extra expectations for restaurants, a restaurant owner should be prepared for situations that require hiring a lawyer. In general, a lawyer is better sooner than later. For independent restaurants without large financial resources, lawyers are better and cheaper if you use them for preventive measures that avoid conflicts and costly lawsuits. After you have been sued is not the first time to hire a lawyer.
There is no legal advice in this article as we are not lawyers. Every restaurant is in a different situation so there is no formula in this article in hiring a lawyer. Always remember that legal issues have substantial consequences and do what you feel is necessary to protect your business and yourself.
WHAT TO DO BEFORE YOU SEE A LAWYER
Much of restaurant owners’ strategy is built around a fundamental truth: lawyers and lawsuits are expensive. Lawyers charge by the hour ($150 – 500 and more) and it adds up fast. If you do not have unlimited resources, it is a good idea to do any research you can before contacting a lawyer. This does not mean cracking open law books. But you can have a better understanding by looking online using information from authoritative sources, like government websites or established industry resources. Basic terms and guidance may be obtained from edited sites like Wikipedia, if you confirm everything through official channels.
Beyond the internet, government officials will often answer straightforward questions. If you have a procedural question (and not explicit legal advice), they can explain how thing are done or point you in the right direction.
Most of the time, your own research will not replace legal advice, but you will have a better idea what the right questions are. Therefore, any task your lawyer does will be more effective. In most preventative situations, you want to have a specific task for a lawyer, such as writing a contract, business organization (like incorporation), real estate issues, helping you secure intellectual property (trademarks, etc.), and dealing with taxes and governmental regulations. Remember that even though the other party in a contract may have a stock agreement they use, a lawyer may be able to get crucial changes that better protect you and your interests.
FINDING THE RIGHT LAWYER
We have established that you need to have a plan to get legal assistance quickly. For the restaurant industry, common areas where you will require legal help are:
- Real estate and zoning
- Trademarks and intellectual property
- Taxes and government regulations
- Business organization (incorporation)
- Employee Relations
- Employee Relations
With basic tasks, you can frequently pay a flat fee (you will have to ask) and not have to deal with hourly billing. With a serious lawsuit or dispute, you want the best representation (your) money can buy and you will probably pay by the hour.
But choosing the lawyer involves a very thorough cost-benefit analysis for independent restaurant owners.
Law is very specialized at this point, where lawyers are experts in one particular area. Sadly, there is no “small business” lawyer as the concerns of a restaurant span several different specialities. The inexpensive approach (and somewhat risky) is to go with some lawyers that act as “generalists” handling several different areas of law. The cautious, safer and very expensive approach is to retain a large law firm as they will have someone ready for almost every situation. This deserves further explanation as there are crucial trade-offs between a lawyer that is a ‘generalist’ and one that is a ‘specialist’. This should only be an issue in routine tasks that are preventative (like contracts, government filings, registering intellectual property), not actual disputes. A “generalist” is the wrong lawyer if there ever is a dispute and you may end up in court. In the case of a lawsuit or dispute, you need a lawyer who specializes in that field of law. Period. You wouldn’t want your family doctor doing brain surgery.
The benefit of the ‘generalist’ is almost always price. They may be much cheaper than a lawyer with specialized expertise.
The prime risk with the “generalist” is that (1) you may not know they are going into an area they have little experience and (2) that it would prohibitively time-consuming for them to get up to speed in particular area of law. Now to be honest, much of what restaurant owners need is routine, especially the preventative, set-up stuff. So you can go one of two routes here, unless you splurge on a big firm. You can either farm out particular tasks (like incorporation) to particular specialized lawyers, or you can trust a ‘generalist’. Again, a ‘generalist’ is more likely to make a mistake. Let me give you a possible example:
Frequently, lawyers, even specialists, work from templates for contracts, making cuts and edits where they are the particular agreement. They do this because it saves time and the has held up in court in the past. A lot of these templates are accessible all lawyers, but they are imperfect as nothing is universal. It is to take a template (based on nationwide norms) that is not to your state’s or municipalities’ laws, and does not change it (unlike someone with specific expertise). This could come back and bite you.
Using common sense and understanding the risks of any legal decision will help you balance whatever you can pay with the quality of legal assistance you are receiving. But common sense needs to be employed at every turn. You may have to shift lawyers or firms if things aren’t working. You may also find yourself in an unusual situation for your industry, such as having to deal with intricate real estate and zoning laws in New York City. You don’t have to go to law school to know that NYC is a highly controlled zoning environment.
2. Questions to Ask a Lawyer Before Hiring Them
These days, clients have the upperhand over lawyers, as there is excess of lawyers. However to take advantage of that and to find a qualified attorney, you need to ask probing questions before you hire them:
Ask about experience. You want to know if a lawyer has done whatever you need them to do, and how frequently. It is better to be as specific as possible especially when you get the sense that yours is not a usual case. You also may need a lawyer with connections to get the best result possible.
Ask about what the focus is of their general practice. Here you may find out if it relates to your business. If they spend most of their practice helping people with wills, they may not be the right kind of lawyer for your restaurant.
Ask if they have represented other restaurants in your sector. If they know restaurants, they will be able to quickly list off other related clients (a good sign) This can give you insight into whether they may have a conflict of interest, if they have represented your direct competition (a bad sign).
Ask about billing. For tasks such as writing a contract that have a known conclusion, you may be able to get a flat fee. With a lawsuit, that is almost never the case. In those situations, request estimates about how many billable hours it will take and what the cost will be. Also communicate the expectation that should the lawyer exceed the estimate, you will be notified in a timely manner.
3. Legal Help from Family and Friends
You may have that cousin who is a lawyer, or an uncle or a college friend, etc. You will be tempted to ask he or she to provide their services. Relying on friends and family can be a source of conflict, especially if it is outside their specialty or you expect them to do it for free. A friend or family member who is a lawyer may actually put in many more hours than the average attorney to ensure that everything is perfect (especially if they don’t normally handle what you need).
But…this person may be perfect in advising you where to seek legal help. They may suggest specific lawyers, review another lawyers work or explain important concepts whether billing or legal. Indeed they may point you to a good lawyer that specializes in that sector.
HOW TO AVOID LAWYERS (or more importantly lawsuits)
No one wants to find themselves involved in a lawsuit. Often, these lawsuits were not inevitable and probably could have been averted by both parties by acting with caution. Even though a lot is out of your hands, you can do things to save yourself the expense and stress of legal proceedings.
1. The advice ‘read the contract before you sign it’ has been repeated a million times. It has been ignored nearly as many. So read contracts through, and if it is especially complex or customized, have a lawyer look it over. Give yourself time to think. Ask all the questions you may have beforehand even if they might seem silly.
2. You can prevent lawsuits and messy squabbles by following contracts you have signed. If you are contractually obligated to pay, you should pay. If the other party is not fulfilling their part of the contract, you cannot just ignore paying bills. You have to communicate in a timely matter your complaint. If they do not take action, you should send them a letter or email (it may help if it is written by a lawyer). Often, you can find a resolution. Also, by being a deadbeat, you become a much more unsympathetic figure if it does end up in court. Acting out of anger can cause you unnecessary harm.
3. You should get payment up front, or at least a substantial deposit to protect yourself from customers or vendors who do not fulfill their responsibility. For restaurants, this problem most often is encountered with catering or renting out the restaurant’s space.
4. Put things in writing. Not everything has to be an airtight contract (which rely on legal help) to be enforceable. Verbal agreements, however, are far less secure. Frequently having documentation (like signed bill), even a record of emails, averts a conflict that comes down to your word vs. someone else’s. You should be only as trusting as you can afford to be. Of course, long-term or valuable or high-risk or critical or complex arrangements should be more formal and require a lawyer with a legal contract. But having a lawyer write a contract is much easier than a lawyer representing you in dispute over a verbal agreement. Even in cases where the other party has the upper-hand, you can suggest changes even if working off their basic contract.
5. Know who you are doing business with. Some businesses have more integrity than others. Anyone in business knows there is a lot of scams and predatory businesses out there and it will save you a lot time, money and frustration not doing business with them. So take at least three of these steps before doing business with previously unknown venders (always be more skeptical of businesses that find you) :
- Call the Better Business Bureau for complaints
- Ask other customers who have done business with them before (but not set up by the business you are investigating)
- Get a D & B report about the company
- Do a background check for previous legal issues and a Google search
- Visit their offices then cross-reference the address
PLACES TO FIND ACTUAL LAWYERS
Now that you are up to speed on legal interactions between restaurant owners and attorneys, it makes sense to narrow down your options, if you don’t have any clue who to hire. You can go to lawyers.com which is a massive directory of lawyers. It is important to find a lawyer in your state as lawyers are certified to the bar by state. Fizzlaw.com will help you even more as it designed for small businesses. You can full biographies, specialties, and can see articles they may have written on different legal subjects. Also, you will be able to access their contact information and go to their website. It is a good place to start. You can also call your local restaurant association if you are a member and see if they have any suggestions. Their suggestions are not proof of competency; often there are no guarantees in certain legal situations. You may also have friends who are restaurant owners who can give you suggestions.
It may take time. The point is to do all you can to have lawyers to prevent disasters beforehand rather than having lawyers fix them afterwards.